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An FBI wiretap on local gamblers has snagged one of the biggest fish in the $3 billion Caribbean offshore gambling industry -- the owner of one of the oldest and most notorious offshore sports books who claimed that it was legal for Americans to bet through toll-free phone lines and the Internet.

Frank Masterana, owner and founder of Caribbean Sports in Costa Rica, will appear before U.S. District Judge John T. Elfvin on Wednesday and plead guilty to gambling charges, a government prosecutor said.

FBI agents running a court-approved wiretap on local bookmakers came across gamblers and bookies placing bets with Masterana, one of the country's biggest illegal bookmakers until a 1988 conviction banished him from his base in Las Vegas and he moved to the Dominican Republic.

Masterana, 71, a salty character with a long gray ponytail, is identified by the Nevada Gaming Commission as an organized-crime associate and listed in its Black Book, which bans him from any casino in the state.

Masterana, a Las Vegas bookie since 1953, was described as one of the last of his generation in an increasingly corporate town by Las Vegas Review-Journal columnist John L. Smith this week.

"In the shadowy underworld of illegal bookmaking," Smith wrote, "Masterana's career has been a stout cork in rough seas. Hurricanes come and go, but the unrepentant bookie somehow manages to pop back up and keep his head above the rough water."

Masterana's Caribbean safe port ended when the Buffalo wiretaps picked up frequent calls from local bookies to Master-ana's toll-free number.

Masterana's clerks gave the day's odds, according to the federal indictment, and a short time later, local gamblers and bookies laid $2,000 and $3,000 bets for customers in Western New York.

On one day alone, March 8, 1996, 24 bets totaling $61,000 were placed by local bookies and bettors to Masterana, according to the indictment.

Though charged only with the Western
New York bets, Masterana was presumably using the same procedures throughout the country and in Canada. A number of Canadian bettors have complained that Masterana never paid them.

One of those charged in Buffalo along with Masterana, Paul Kaczowski, 51, a Niagara Falls bookie, pleaded guilty to a federal gambling conspiracy charge Thursday before Elfvin.

Kaczowski faces a possible prison term of eight to 14 months when he is sentenced by Elfvin on May 11.

Assistant U.S. Attorney Anthony M. Bruce said there was virtually no interruption in the Western New York bet-taking when Kaczowski entered federal prison in 1996 for a 31-month term on an unrelated gambling conviction.

Kaczowski had pleaded guilty for scheming with former Niagara Falls Councilman Michael S. Gawel, an attorney who ran Kaczow-ski's sports book through his attorney's trust fund. Gawel, who got Kaczowski a no-show restaurant job, was sentenced to 17 months.

Kaczowski, the prosecutor said, turned his payoff and collection duties for Masterana over to another local man, Bruce Ziminski, who earlier pleaded guilty.

Masterana, after his 1988 banishment from Las Vegas, was among the first U.S. gamblers to set up offshore operations in the Caribbean. He started in the Dominican Republic, but more recently shifted operations to Costa Rica, along with a number of other offshore gambling companies.

The offshore gaming industry is expected to draw $3.2 billion this year from bettors, according to one industry study.

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